January 14, 2007

Belly Up

Venezuelan President Hugo Chávez said on Saturday the country's entire energy sector had to be nationalized, reinforcing his socialist revolution and possibly giving himself more targets for state take-over.

But he said he would permit foreign firms to hold minority stakes in energy deals.

The anti-U.S. leader, in power since 1999, this week announced he would nationalize power utilities and the country's biggest telecommunications firm, confirming his status as the catalyst of Latin America's swing to the left.

"We have decided to nationalize the whole Venezuelan energy and electricity sector, all of it, absolutely all," Chávez said in his annual state of the nation address to parliament, potentially opening up more projects for state acquisition in the No. 4 crude exporter to the United States.

The president was reinaugurated this week for a term that runs through 2013.

Chávez has already pursued oil and gas projects and power utilities but on Saturday left no leeway for a private company to hold a majority in operations anywhere in the energy sphere.

What will be targeted?
It was not immediately clear whether his pronouncement on nationalizing the whole sector was a precursor to moves against specific projects or companies.

Venezuela will have to judge how closely private firms must be connected to the country's oilfields, refineries, pipelines, gasoline stations and coal mines to count as targets for nationalization.

Huge oil service companies such as Halliburton and Schlumberger operate in Venezuela but Chávez gave no indication whether deals involving such businesses were now in his sights.

Venezuela's Hugo Chavez and Iran's Mahmoud Ahmadinejad -- fiery anti-American leaders whose moves to extend their influence have alarmed Washington -- said Saturday they would help finance investment projects in other countries seeking to thwart U.S. domination.

The two countries had previously revealed plans for a joint $2 billion fund to finance investments in Venezuela and Iran, but the leaders said Saturday the money would also be used for projects in friendly countries throughout the developing world.

"It will permit us to underpin investments ... above all in those countries whose governments are making efforts to liberate themselves from the [U.S.] imperialist yoke," Chavez said.

"This fund, my brother," the Venezuelan president said, referring affectionately to Ahmadinejad, "will become a mechanism for liberation."

"Death to U.S. imperialism!" Chavez said.

Ahmadinejad, who is starting a tour of left-leaning countries in the region, called it a "very important" decision that would help promote "joint cooperation in third countries," especially in Latin America and Africa.